by Anne Hedges
The 2017 Legislature passed 7 bills that benefitted the coal industry or gave millions of dollars in funding to the Colstrip community and one plant owner – Talen Energy. The 2019 Legislature is on pace to exceed last session’s subsidies and provide nearly unlimited financial windfalls to another owner – NorthWestern Energy (NWE). Some of the bills, such as SB 278 and SB 199, are unprecedented give-aways to NorthWestern (see article on page XX). Others are nothing more than an attempt to create leverage in a private coal contract negotiation between the Colstrip plant and the neighboring coal mine. A few would be a positive step forward for Montana and coal communities.
Two of the positive Colstrip transition bills are most notable because they deal with the cleanup and the reduction in NWE’s customers’ bills when the Colstrip plant closes before 2042 (the irrational date by which NWE claims it will close). First, HB 467 (Rep. Denise Hayman, D-Bozeman) would allow NWE to seek approval from the Montana Public Service Commission to issue ratepayer-backed bonds to pay off its investment in Colstrip and reinvest the money in cheaper, cleaner energy. The issuance of such bonds is akin to refinancing a mortgage to get a lower interest rate. The bill would allow NWE’s customers to pay a lower interest rate for the remaining cost of Colstrip, which currently is around $300 million at an 8.25% rate of return. The bill has passed the House on an 87 to 13 vote.
Second, Sen. Janet Ellis (D-Helena) is proposing to revive a bill from 2017 that would require the Montana Department of Environmental Quality (DEQ) to impose bonds on the Colstrip power plant owners that are adequate to cover the cost of remediation of the massive coal ash ponds. DEQ currently estimates the clean-up costs to be up to $700 million. In 2017, DEQ misled a legislative committee and said that the plant would be fully bonded by Summer 2017. That was not true. DEQ still does not have bonds in place for the two largest and most complex coal ash impoundment areas. DEQ says that it hopes to have that bonding by the end of this year. Sen. Ellis’ LC 1716 will simply guarantee that will be the case.
Other good coal bills include SB 264 (Sen. Jason Small, R-Busby). It would require the Colstrip owners to pay remediation workers the prevailing wage for all clean-up activities at Colstrip. This would help guarantee the cleanup is done by a more skilled workforce. The bill passed the Senate on a 42 to 8 vote, and will have a hearing in the House on March 19th. Sen. Duane Ankney’s (R-Colstrip) bill, SB 191, would allow local governments to finally establish a local coal trust fund, meaning they could set aside local revenues from coal extraction and use the funds to pay for the impacts of coal plant closure and transition. The bill passed the Senate on a 47-0 vote. It will be heard in the House on March 13th. Sen. Ankney also has SB 201, which would require the State to impose bonds on bankrupt coal mining companies for worker pensions. The bill passed the Senate on a 50 to 0 vote, and will be heard in House Natural Resource Committee on March 18th. Finally, HB 292 (Rep. Barry Usher, R-Billings) would increase the funding available to coal-impacted communities from $1.6 million to $3.3 million a year to help pay for the negative impacts of decreased coal development in Montana. The bill passed the House on an 89 to 8 vote.
Some of this session’s pro-coal bills are incredibly misguided. One of the worst bills was the failed attempt by Rep. Rodney Garcia (R-Billings) to allow the State to buy the Colstrip plant by allowing it to bond for up to $500 million. Fortunately, the House Energy Committee rejected that idea.
MEIC also opposed bills that attempted to increase the leverage of the Colstrip plant owners in their negotiations over coal contracts with the neighboring Rosebud mine. Each year Colstrip owners pay about $133 million for Rosebud coal (this figure excludes sales to Talen Energy because it is unregulated). The Colstrip plant and the mine were built to work together. The plant’s boilers were designed for Rosebud coal, the initial Colstrip permit required the use of Rosebud coal, and the air permit was based on the chemical composition of Rosebud coal. Now the owners, particularly Talen and NWE, want the ability to sever that obligation and buy coal from Wyoming if necessary. MEIC opposes these bills.
SB 252 (Sen. Duane Ankney, R-Colstrip) would eliminate the permit obligation to use Rosebud coal. That bill passed the Senate on a 37 to 13 vote, and has moved to the House. The other bill, HB 476 (Rep. Jim Keane, D-Butte) would allow NWE or Talen to borrow up to $50 million from the State Board of Investments to buy a larger interest in the Colstrip plant, or to build a facility that would allow the plant to import coal from elsewhere. Not only would this bill authorize funding for financially risky investments in coal, but it would dramatically increase the amount that could be borrowed from this fund, but only for increasingly uneconomic coal investments (there is currently a $10 million cap on these low-interest loans). This increase would also preclude other businesses from using this limited funding source for other, more viable and sustainable projects.
MEIC’s goal with these and other coal bills is to make sure that Montana is not held hostage by self-serving monopoly utilities, but instead works to ease the transition to cleaner energy.